Hawker Beechcraft Deal Triggers Skepticism

Bethany Whitfield

Thursday, July 12, 2012 at 08:47 PM ET

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Hawker 400

Key Takeaways:

Hawker Beechcraft plans to sell to Beijing-based Superior Aviation for $1.79 billion, a deal coming after Hawker's recent bankruptcy filing to address $2.5 billion in debt.
Industry analysts are skeptical of the high purchase price, especially given the exclusion of the Hawker Beechcraft Defense Company from the agreement.
Questions are also raised about Superior Aviation's ability to effectively leverage Hawker Beechcraft's older product lines to capitalize on the promised growth in the Chinese aviation market due to Superior's small size.
The acquisition is also viewed as a potential competitive threat to Cessna, which recently partnered with AVIC to enter the Chinese market.

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In the wake of Hawker Beechcraft’s announcement that it plans to sell the company to Beijing-based Superior Aviation for $1.79 billion, certain aspects of the deal are raising eyebrows among skeptical industry watchers.

A number of analysts quoted in multiple news reports have questioned the large sum being offered for the company, maintaining such an amount for the beleaguered entity – which filed for bankruptcy in May to wipe out a massive $2.5 billion in debt – is excessive, especially considering that Hawker Beechcraft Defense Company is not part of the agreement.